Historical data shows that a consistent $500 monthly investment into Saratoga Investment Corp 8.50% (SAZ) starting in 2020 would have turned a total investment of $29K into $36K today. This represents a total return of 24.7% over the 6-year period, compounding through dividend reinvestment and market growth.
The Impact of Dividend Reinvestment (DRIP)
Saratoga Investment Corp 8.50% pays a dividend (currently yielding ~0.13%). By utilizing a Dividend Reinvestment Plan (DRIP), generated dividends automatically purchase fractional shares. Over this 6-year period, regular dividend payments totaled $6K. Reinvesting these dividends continuously compounded your returns, accelerating the portfolio's growth far beyond simple price appreciation.
SAZ vs. S&P 500 (SPY) Benchmark
When comparing this dollar cost averaging strategy against a broad market index,SAZ underperformed the S&P 500 ETF (SPY). The same $500 monthly contributions into SPY would have grown to $43K, compared to SAZ's $36K.